PROJECT REPORT

ON
“CONCEPT OF CONDITIONAL TRANSFERS”

SUBMITTED TO: SUBMITTED BY:

Prof. Rajinder Kaur Shwas Bajaj

B.A.L.LB. (H)
Semester: 5 th
Section: B
Roll No.: 69/18
 ACKNOWLEDGEMENT

For the success and final outcome of this project, I would like to thank Prof. Rajinder Kaur,
who gave me this wonderful project which helped me to enhance my knowledge in the
subject. This project would not have been possible without her constant support and
guidance.

I would also like to express my gratitude towards my family and friends who helped me with
their valuable suggestions and guidance and have been helpful in various phases of
completion of this project.
 TABLE OF CONTENTS

S. No. Topic Page No.

1. Introduction 5

2. Kinds of Conditions 5

3. Objective of Section 25 5

4. Condition Precedent (Section 26) 6

5. Void Condition Precedent 6

6. Doctrine of Acceleration (Section 27) 7

7. Conditional Limitation (Section 28) 8

8. Performance of Condition Subsequent (Section 29) 8

9. Invalid Subsequent Condition (Section 30) 8

10. Condition Subsequent (Sections 31 and 32) 8

11. No Time Specified for Performance of Condition (Section 33) 9

12. Time Specified for Performance of Condition (Section 34) 9

13. Bibliography 10
 TABLE OF CASES

Dawson v. Oliver-Massey, (1876) 2 Ch D 753. ..................................................................... 6

Ismail Haji Arat v. Umar Abdulla, (1942) Bom. 155. ............................................................ 7
Radha Prasad v. Rani Mani, (1906) 33 Cal. 947. ................................................................... 7
Rajendra Lal v. Mrinalini Dassi, AIR 1922 Cal. 116. ............................................................ 6
Ramalinga Padayachi v. Natesa Padayachi, AIR 1967 Mad. 461,463 .................................... 6
Shyama Charan v. Naba Charan (1912) 17 Cal WN 39 ......................................................... 9
Tin Cowri Dassee v. Krishna (1893) 20 CAL. 15 .................................................................. 9
Underwood v. Wing, (1885) 19 Beav. 459. ........................................................................... 7
Venkatarama v. Aiyasami, AIR 1923 Mad 67 ....................................................................... 9
Wilkinson v. Wilkinson (1871) Eq 604 ................................................................................. 7
 INTRODUCTION

Property may be transferred either absolutely or conditionally. Where property is transferred

absolutely, it is unconditional transfer and the transferee gets the interest without any
subjection or limitation. On the other hand, when property is transferred conditionally, the
transfer is subject to a certain conditions or limitations and the legal effect of transfer may
vary according to the nature of condition attached to it. A transfer of property with certain
conditions is called conditional transfer.

Sections 25 to 34 deal with conditions and conditional transfers. Sections 25 and 26 deal with
condition precedent. Sections 29 to 34 deal with condition subsequent. Section 27 deals with
doctrine of acceleration and Section 28 with the doctrine of acceleration.

KINDS OF CONDITIONS

Condition Precedent Condition Subsequent Condition Collateral

(Pre-Condition) (After Condition) (Simultaneous Condition)

Example: A gifts his Example: A gifts his house to B Example: A gifts his house to
house to B on the on a condition that he will not B on a condition that A has to
condition that he marries visit USA in the next 5 years. live in the house.
to C.

According to Section 25 of the Transfer of Property Act, 1882, “An interest created on a
transfer of property and dependent upon a condition fails if the fulfilment of the condition is
impossible, or is forbidden by law, or is of such a nature that, if permitted, would defeat the
provisions of any law, or is fraudulent, or involves or implies injury to the person or property
of another, or the Court regards it as immoral or opposed to public policy”.

OBJECTIVE OF SECTION 25

The object of section 25 is to eliminate the following conditions- If the following conditions
are the conditions then the transfer would be void.

 Impossible Conditions
 Unlawful/forbidden by law
 Impossible performance
 Opposed to public policy
 Fraudulent transfers
 CONDITION PRECEDENT (Section 26)

Condition precedents are the conditions which are essential to be performed before the
interest arises. According to the section, the condition shall be deemed to be fulfilled if it is
substantially complied with. In Dawson v. Oliver-Massey,1 A is ready to transfer his property
to B on the condition that he needs to take the consent of X, Y and Z before marrying. Z dies
and afterward, B takes the consent of X and Y so the transfer can take place as there has been
substantial compliance.

VOID CONDITION PRECEDENT

In the following cases the conditions are void and the transfer fails because the conditions
cannot be fulfilled:

(a) Impossible to Perform: A condition which cannot be practically performed is called

impossible condition. For example, A letting B his farm on the condition that he runs a 100
kilometres in an hour is an impossible condition and hence void. In Rajendra Lal v.
Mrinalini Dassi,2 the condition in the bequest was that the legatee excavated a tank when the
testator himself did it in his lifetime. This was practically not possible, therefore, the
condition was void and bequest failed.
(b) Unlawful: In the following cases the conditions are unlawful and void; the transfer with such
conditions fails:
(i) Forbidden by Law: Transfer of property with a condition forbidden by law is
void. For example, A transfers his house to B on condition that B shall transfer his
excise-license to C. This is a void transfer because transfer of license is forbidden
by law.
(ii) Defeats the Provisions of Law: Where the condition is such that if performed it
would defeat the provisions of any existing law, it is void. Thus, where A transfers
his properties to B (a married Christian whose wife is alive) on condition that B
shall marry C, the transfer fails.
(iii) Fraudulent: A condition the fulfilment of which amounts to ‘fraud’ is unlawful.
(iv) Involves any Injury to Person or Property: In Ramalinga Padayachi v. Natesa
Padayachi,3 A, the buyer of some property was aware that the C, the seller, does

1
Dawson v. Oliver-Massey, (1876) 2 Ch D 753.
2
Rajendra Lal v. Mrinalini Dassi, AIR 1922 Cal. 116.
3
Ramalinga Padayachi v. Natesa Padayachi, AIR 1967 Mad. 461,463
 not have a good title, and he persuades the C to transfer the property to A, the
buyer with the object of giving trouble to the true owner. A later filed an action
suit to claim indemnity from C for loss to the buyer in the litigation of that
property. The court held the suit cannot be maintained A bought the property to
imply injury to the true owner.
(v) Opposed to Public Policy: Where the condition precedent is immoral or opposed
to public policy, the transfer with such condition cannot take place. In Wilkinson
v. Wilkinson,4 the condition where one party was required to desert her husband
for the transfer to go through, this was held by the court as invalid as it was
against public policy.

DOCTRINE OF ACCELERATION (Section 27)

Section 27 gives legislative effect to the general rule that where an interest is created on a
transfer of property is intended to take effect upon the failure of a prior interest created by the
same transaction, such interest will take effect upon the failure of the prior interest, unless it
is clearly intended that the subsequent interest is not to take effect unless the prior interest
failed in a particular manner and the failure happened in some other manner. In Ismail Haji
Arat v. Umar Abdulla5, it has been held that the object of this rule is to give effect to the
intention of the transferor.

In Radha Prasad v. Rani Mani6, the testator made a gift to a son to be adopted by his wife
and, in case of his death without issue, to his daughters. The power of adoption proved to be
invalid, but although the prior bequest failed, the gift over to the daughters took effect.

Exception:- Paragraph 2 of the section lays down that where the intention of the transferor is
clear and specific that the second transfer would take effect if prior transfer fails in a
particular manner, the second transfer cannot take place unless the prior transfer fails in that
way. In Underwood v. Wing7, where there was a gift to the testator’s wife absolutely, and a
“gift over”, in case she should die in the testator’s life-time. The testator and his wife both
died in the same shipwreck and as it was impossible to prove who survived, the transfer
failed.

4
Wilkinson v. Wilkinson (1871) Eq 604
5
Ismail Haji Arat v. Umar Abdulla, (1942) Bom. 155.
6
Radha Prasad v. Rani Mani, (1906) 33 Cal. 947.
7
Underwood v. Wing, (1885) 19 Beav. 459.
 CONDITIONAL LIMITATION (Section 28)

Section 28 incorporates the principle of defeasance wherein, upon a transfer, an interest of

one person terminates thereby vesting the same in another person. According to it, when
interest is created in a particular person by transfer of property, he can be divested of the
estate subsequently on the happening of an uncertain event and vests the same in another
person.

For example, A transfer’s property to B with a condition that B shall go to England within 3
years from such transfer and if he doesn’t do so the property shall vest in C. In this situation,
the transfer of property from A to C is a subsequent transfer and it will take effect only the
prior transfer from A to B fails. Therefore, if A goes to England within 3 years from the date
of transfer, the property shall not vest in C but if B does not go to England within the
stipulated time, it shall devolve on to C.

The general rule provided in this section is, however, subject to the rules contained in
Sections 10, 12, 21, 22, 23, 24, 25, and 27 of the Act.

PERFORMANCE OF CONDITION SUBSEQUENT (Section 29)

This section provides that a condition subsequent upon the fulfilment of which the second (or
ulterior) transfer is to take place, must be strictly fulfilled. For example, A transfers his
garden to B with a condition that if B cuts down a particular tree, the garden shall belong to
C. B has a vested interest in the garden. If B cuts down several other trees around that
specified tree, his interest in the garden is not divested. But as soon as he cuts down that
particular tree, his interest in the garden is divested and it shall now belong to C.

INVALID SUBSEQUENT DISPOSITION (Section 30)

This section provides that if the ulterior or the second disposition is invalid and fails, the prior
transfer is not affected and stands valid. For example, A transfers a farm to B for life, and, if
she does not desert her husband, to C. B is entitled to the farm during her as if no condition
had been inserted.

CONDITION SUBSEQUENT (Sections 31 and 32)

Section 31 deals with a condition subsequent which terminates an interest. Such a condition
must be valid. If the condition is void, it does not terminate the interest. In Venkatarama V.
Aiyasami Ayar,8 A prisoner was sentenced for life and before serving his sentence he
transferred his property to B with a condition that the interest created in the transferee shall
cease to exist if the transferor return from the prison. It was held that the condition imposed
was valid therefore when he returned from prison the transfer in favour of the transferee
ceases to exist.

NO TIME SPECIFIED FOR PERFORMANCE OF CONDITION (Section 33)

Section 33 of the Act states that if a person’s interest is created in a property but subject to his
fulfilling a condition for the performance of which no time is specified then the person is not
permitted to create conditions by his conduct which renders impossible the fulfilment of the
condition either permanently or indefinitely. He cannot evade the fulfilment of conditions,
yet plan to take benefit under the transfer, thereby breaking the condition.

In Shyama Charan v. Naba Chandra,9 a person bequeathed certain properties to his

daughter’s son in the event of his widow dying without adopting a son and such interest
vested in him was conditional on him living in the family house, but the son himself joins the
wife in selling the house. It was held that the son will be deprived of the interest given to him
by bequest as he breached the condition.

TIME SPECIFIED FOR PERFORMANCE OF CONDITION (Section 34)

The section states that when upon a transfer, time is specified for the happening or non-
happening of an act, then the act should be performed in that time specified time only
otherwise the interest on the property shall transfer to any other person. It is pertinent to note
that if any delay is caused in the performance of an act by the person who is interested in its
non-fulfilment, then the delay shall be condoned and the condition shall stand discharged.

In Tin Cowri Dassee v. Krishna,10 A transferred property to B with a condition that if A does
not live at a holy place for three months from the date of the transfer then he shall be divested
of his interest in the property. Relatives of B with an intent of non-fulfilment of this condition
confined A in a secluded place. It was held the condition deemed to be discharged as relatives
of A caused the non- performance of the condition with anticipation that property would
devolve on them.

8
Venkatarama v. Aiyasami, AIR 1923 Mad 67
9
Shyama Charan v. Naba Charan (1912) 17 Cal WN 39
10
Tin Cowri Dassee v. Krishna (1893) 20 CAL. 15
 BIBLIOGRAPHY

BARE ACT:

 The Transfer of Property Act, 1862

BOOKS

 Tripathi G.P., ‘The Transfer of Property Act’, Central Law Publications, 19th Edn.,
Allahabad, 2020
 Sinha R.K., ‘The Transfer of Property Act’, Central Law Agency, Allahabad, 11th
Edn., 2010.

WEBSITES:

 www.indiankanoon.org
 www.scconline.com
 https://www.academia.edu/37504281/conditional_transfer_section_25_of_transfer_of
_property_act_1882
 https://blog.ipleaders.in/conditional-transfers-transfer-property-act/
 http://lawtimesjournal.in/conditional-transfer-condition-precedent-and-condition-
subsequent/